The government strongly encourages parties to seek to resolve any emerging contractual issues responsibly – through negotiation, mediation, or any other alternative dispute resolution (ADR) mechanism before considering litigation. The reasons for this plea by the government can be attributed to the advantages that ADR can bring over contested proceedings before the courts. They include, but are not limited to, the confidentiality of the proceedings, the speed with which the dispute can be resolved, the flexibility of ADR to promote creative commercial (as opposed to just legal) solutions, the relatively low costs involved, the parties’ ability to decide who can assist them to resolve the dispute and the fact that parties have control of the dispute resolution process.
There have been some very significant judgments handed down by the Court of Appeal. An example is the case of Cowl and others v. Plymouth City Council [2001] EWCA Civ 1935 in which the then Lord Chief Justice said “ both sides must by now be acutely conscious of the contribution of ADR ……..” also that “Parties should have been able to come to a sensible conclusion as to how to dispose the issues which divided them. If they could not do this without help, then an independent mediator should have been recruited to assist”
Another example is the case of Dunnet v. Railtrack [2002] EWCA Civ 302. The court in this case refused to award costs to the successful party on the basis that it had failed to engage with a mediation process when invited to do so. The court in that case said “Skilled mediators could achieve results that went far beyond the court’s powers and lawyers who dismissed the opportunity for arbitration or mediation out of hand would suffer uncomfortable consequences……..It has to be emphasised that it was a lawyer’s duty to further the overriding objectives under CPR r 1.1. If parties turn down ADR out of hand they will suffer the consequences when costs came to be decided” A court can order parties to a dispute to consider ADR at a case management conference. In the case of Halsey v. Milton Keynes General NHS Trust [2004] EWCA Civ 576, the Court of Appeal considered it to be the strongest form of encouragement, falling short of compulsion. The position of the Court of Appeal has been that the parties are required to consider ADR, but with the courts stopping short of ordering them to do so.
